Dubious donations (2012 edition)

Barack Obama has proved the greatest campaign fund-raiser of all time by a long shot. In 2008 his campaign raised more than $750 million. The Obama campaign even went the extra mile to raise campaign funds by failing to adopt standard protections against fraudulent and illegal giving. Federal law prohibits foreign contributions and requires the disclosure of identifying information for contributions in excess of $200. Campaigns must accordingly keep running totals for each donor and report them once they exceed $200.

As we and others noted, the 2008 Obama campaign’s records revealed big contributors with names like “Doodad Pro” (employer: “Loving,” profession: “You”) and “Good Will” (same employer and profession). Both donated via credit card. I believe it was Pamela Geller who reported that some donations came from overseas — raising the question of whether Obama was accepting donations from foreigners.

All of which prompted an enterprising reader to test the controls put in place to enforce compliance with federal campaign law by the Obama and McCain campaigns. He decided to conduct an experiment. He went to the Obama campaign Web site and made a donation under the name “John Galt” (the hero of Ayn Rand’s novel Atlas Shrugged). He provided the equally fictitious address “1957 Ayn Rand Lane, Galts Gulch, CO 99999.” He checked the box next to $15 and entered his actual credit-card number and expiration date. He was then taken to the next page and notified that his donation had been processed. Others repeated “John Galt’s” experiment, giving to Obama under such fictitious names as Della Ware, Joe Plumber, Idiot Savant, Ima BadDonation (with a Canadian bank card) and Fake Donor.

The Obama campaign was able to take these donations because it had turned off the standard Address Verification System that screens credit-card charges for matching names and addresses. (It can also screen cards issued by foreign banks.) The McCain campaign used AVS and provided a searchable database of all donors, including those who fell below the $200 threshold. The Obama campaign chose not to use the AVS system to screen donations. (The McCain campaign rejected such donations through the use of the AVS system.) You can find a good description of the AVS and CVV fraud prevention devices here.

I wrote about this in the New York Post column “Dubious donations.” The Post subhead observed: “Bam’s Web site invites fraud.” The Washington Post reported on the matter two days later in the story “Obama accepting untraceable donations,” by Matthew Mosk. Mosk quotes Obama campaign officials on their practices. According to them, everything was copacetic.

Urgent Agenda reader Adrian Murray wondered if the Obama campaign has become any more compliant this time around than it was last time. He conducted the necessary experiment and wrote Urgent Agenda proprietor Bill Katz:

If you go here you will note that credit card donations to the Obama election campaign do not require the credit card security code [i.e., the CVV code]. What they have done is disable the Address Verification System (AVS) which prevents credit card fraud. Yesterday, just to see what would happen, I submitted a donation and filled out the form as follows:

After submitting, I received an email that began, “Dear Adolph, thank you for your generous donation….”

I then went to the Romney and Santorum websites and tried the same thing. Both rejected the donations with a message that the address could not be verified as belonging to the card holder.

Try it. Make up a name and an address and donate to Obama. Then try it with the other two. Only Obama will accept the donation.

Why is this important? Federal law prohibits any foreign nationals from financially contributing to any election in the United States. It’s on the FEC website and is one of our most important safeguards against foreign influence in our elections. But anybody in the world can contribute to Obama. Not only that, but they can do so anonymously. Not only that, they can contribute an unlimited amount since there is no record of who made the donation. I could contribute $49 every day for the rest of my life by just changing names every time I reach $2,500 and no one would be the wiser.

I haven’t repeated Mr. Murray’s experiment, but I believe the situation is as described in the words of the Talking Heads: “Same as it ever was.”